‘Money sent home’ is helping the poor rural people

Rome, 15 April 2010 – Migrant workers from a majority of countries in Central America and the Caribbean were able to send home more money to their families during the first months of 2010 than at the same time last year, the International Fund for Agricultural Development (IFAD) announced today.

“After a year of extreme hardship because of the ongoing economic challenges resulting from the financial crisis, migrant workers are beginning to send more money home,” said Kevin Cleaver, Associate Vice-President of IFAD, a specialized agency of the United Nations dedicated to eradicating poverty and hunger in rural areas of developing countries.

Honduras, El Salvador and Guatemala each showed strong increases in remittances for the first time since the onset of the crisis, according to information released this week by the Central Banks of these countries. Information released up to February also indicated this trend for Jamaica and Nicaragua. By comparison, Mexico continues to be hardest hit by the crisis, experiencing an almost 16 per cent decline in remittances in 2009 and a similar decline during the first two months of 2010.

Remittances are essential to many economies in the region. The Central American and Caribbean countries received almost US$16 billion in remittances during 2009, representing between 11 and 16 per cent of GDP for many nations.

Up to 40 per cent of these cash flows go directly to the rural areas where remittances are most important to families’ livelihoods. Rural families have been hit hard in the past by the drop in remittances. The growth in remittances in February and March for the five countries could be the first indication of an upward trend of important revenue streams.

“There’s now been four consecutive months of growth in remittances to Jamaica,” said Josefina Stubbs, IFAD’s Director of Latin America and the Caribbean Division. “We believe it indicates that Jamaica will likely be the first country in the region to begin a recovery from the decline in remittances over the past year.”

Remittances are vital to the Jamaican economy, representing approximately 15 per cent of GDP last year – the equivalent of $660 per person living in Jamaica. This makes it particularly significant that Jamaicans living abroad sent home 7.4 per cent more money to their families this February than at the same time last year. In particular, remittances from the United States, which account for 62 per cent of remittances to the country, rose strongly.

“Because of the importance of remittances to the families that receive them, especially in rural areas, IFAD’s multi-donor Financing Facility for Remittances (FFR) provides grants to organizations seeking to maximize the impact of these funds,” said Pedro De Vasconcelos, IFAD’s Programme coordinator, Financing Facility for Remittances, Technical Advisory Division.

Together with the Inter-American Development Bank, the FFR is funding one such project in the region.

“The initiative, which is being implemented by the Jamaica National Building Society, will allow residents in the targeted communities to gain easier access to a range of financial services,” added De Vasconcelos.

Notes to editors

TheFinancing Facility for Remittances (FFR) –is a multi-donor fund that co-finances development projects across the globe. Many of their efforts focus on easing access to remittances in rural areas. It provides grants to public, private and civil-society partners and has initiated more than 40 projects in 38 countries throughout the developing world.

The members of the FFR include:

International Fund for Agricultural Development (IFAD)

Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB)

The International Fund for Agricultural Development (IFAD) works with poor rural people to enable them to grow and sell more food, increase their incomes and determine the direction of their own lives. Since 1978, IFAD has invested over US$11 billion in grants and low-interest loans to developing countries, empowering some 350 million people to break out of poverty. IFAD is an international financial institution and a specialized UN agency based in Rome – the UN’s food and agricultural hub. It is a unique partnership of 165 members from the Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the Organisation for Economic Co-operation and Development (OECD).